The ‘bummer’ of $7,500 EV tax credit: It may be hard to get…

Tomekbudujedomek | Moment | Getty ImagesThe historic climate legislation President Joe Biden signed in August offered a federal tax break — worth up to $7,500 — to households that buy new electric vehicles.But it may be tough for consumers to get the full value of the tax credit — at least initially.That’s largely due to the structure of the clean vehicle credit and certain requirements for consumers and car manufacturers. Those roadblocks, however, are poised to ease in the longer term, experts said.The tax credit ‘bummer’: It’s nonrefundableThe legislation, called the Inflation Reduction Act, made the tax credit “nonrefundable.“That means consumers can only get the full financial benefit if they have a federal tax liability of at least $7,500. A nonrefundable credit offsets a consumer’s federal tax bill but any leftover value is lost.Let’s say a consumer buys an electric vehicle today. When filing their 2022 tax return, the person finds they owe $5,000 in federal taxes. This person wouldn’t get the full $7,500 tax credit — they’d be able to claim $5,000 and cut their tax bill to zero. But the remaining $2,500 would be lost. In other words, those funds wouldn’t be issued to the consumer in a tax refund.In addition, unlike some other tax credits in the bill — such as the “residential clean energy” credit for home solar panels and other installations — any unused value doesn’t carry over to future tax years to offset a future …